100% renewable by 2030

In late 2016, we reported on ATA analysis that showed a 100% renewable grid is feasible and economic in the long-term. Here, Andrew Reddaway follows up to see how we’re progressing towards that goal.

The last year has seen much action in the electricity grid, both announced and commenced. It’s become clear that the electricity grid’s transition is well underway, as coal-fired power stations are being replaced by renewables. However, poor planning and coordination has caused problems such as curtailment of wind generation in SA.

Transition planning needed
As the grid transitions to a high level of renewables, good long-term planning is required. If the grid’s current planning arrangements continue unchanged, decisions and investments will be uncoordinated. They may make sense for the short-term profits of individual companies, but may not lead to a well-designed overall system. The Chief Scientist considered this, and recommended an “integrated grid plan” by the Australian Energy Market Operator (AEMO).

In the current system, generators compete against each other, may close without notice and have a business incentive to conceal their future intentions.

There is no guarantee that new power stations will be built—the system expects that investors will foresee a shortfall, identify a profit and construct the needed infrastructure. To assist investors, AEMO annually produces the Electricity Statement Of Opportunities report attempting to identify future shortfalls. This document only looks ahead 10 years, and doesn’t consider scenarios such as 100% renewables. AEMO also produces a transmission report, which looks ahead 20 years but has a relatively narrow focus on transmission lines and related assets.

In hindsight this system has a clear flaw. If investors fail to act in time, generating capacity may be insufficient to meet demand. It takes several years to build a new power station, but an old one can be closed very quickly—Hazelwood’s owners provided only five months notice. Individual asset owners have no responsibility for overall system reliability.

This is why interventions in the market have been required in 2017, including the SA government’s Energy Plan.

The current system also relies heavily on clear, long-term government policy to guide investors. Without such policy, investors face the risk that their newly-built asset might have to contend with unexpected new incentives, rules and regulations.

The best plan so far
In the absence of long-range planning by authorities for a high-renewable grid, the best studies have come from universities. In February 2017, the ANU published a clear vision for our future grid. Its researchers found the most economic combination for a fully renewable grid comprises: